Export Competitiveness and Trade Agreements: Analysis and Insights from Israel’s Experience

Ronen, Eyal and Benizri, Yohan (2018): Export Competitiveness and Trade Agreements: Analysis and Insights from Israel’s Experience. Published in: Global Trade and Customs Journal , Vol. 13, No. 4 (1 April 2018): pp. 168-181.

Abstract

Israeli manufactured export performance has been on a growth path for the past two decades. This growth is partly due to the continuing shift in Israeli export specialization patterns from traditional products towards technology-intensified exports. However, Israel’s strong export competitiveness also derives from proliferating free trade agreements (FTAs) with its trading partners, especially the European Union (EU). This paper analyzes export statistics to provide data validating the positive impact of recent FTAs on Israel’s export comparative advantages across all sectors between 1995 and 2015. It employs an econometric framework to examine stability and specialization trends, as well as convergence. Furthermore, the authors add to the literature by performing a survival analysis, using the Kaplan-Meier Survival Rate model, to identify particular Israeli export sectors that have benefited from a longer pe- riod of competitive advantage than other sectors due to the EU-Israel Association Agreement.

• Item Type: MPRA Paper
• Language: English
• Keywords: Export Competitiveness, Survival Analysis, Trade Agreements.
• Subjects: F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade

References

Balassa, B. (1965). Trade Liberalization and Revealed Comparative Advantage. Manchester School of Economic and Social Studies, 33: 99-123. http://dx.doi.org/10.1111/j.1467- 9957.1965.tb00050.x

Bender, S. and Li, K.W. (2002). The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports. Working Papers 843, Economic Growth Center, Yale University

Bojnec, S. and Ferto, I. (2008). European Enlargement and Agro-Food Trade. Canadian Journal of Agricultural Economics, 56(4): 563-579. http://dx.doi.org/10.1111/j.1744-7976.2008.00148.x

Bojnec, S. and Ferto, I. (2015). Agri-food Export Competitiveness in European Union Countries. JCMS: Journal of Common Market Studies, 53: 476-492. http://dx.doi.org/10.1111/jcms.12215

Cantwell, J. (1989). Technological Innovation and Multinational Corporations. Basil Blackwell, Cambridge, MA.

Cleves, M.A., Gould, W.W., and Gutierrez, R.G. (2004). An Introduction to Survival Analysis Using STATA. Stata Press, College Station, Texas.

Dalum, B., Laursen, K. and Villumsen, G. (1998). Structural Change in OECD Export Specialisation Patterns: De-Specialisation and Stickiness. International Review of Applied Economics, 12: 423-443. http://dx.doi.org/10.1080/02692179800000017

De Benedictis, L. and Tamberi, M. (2004). Overall Specialization Empirics: techniques and applications. Open Economies Review, 15: 323- 346.https://doi.org/10.1023/B:OPEN.0000048522.97418.99

Freund, C. (2000). Different Paths to Free Trade: The Gains from Regionalism. Quarterly Journal of Economics, 115 (4): 1317-1341. https://doi.org/10.1162/003355300555088

Hart, P.E. and Prais, S.J. (1956). The Analysis of Business Concentration: A Statistical Approach. Journal of the Royal Statistical Society, 119: 150-191. http://dx.doi.org/10.2307/2342882

Jambor, A. (2013). Comparative Advantages and Specialisation of the Visegrad Countries Agri- food Trade. Acta Oeconomica et Informatica, 16(1): 22-34.

Kojima, K. (1964). The Pattern of International Trade Among Advanced Countries. Hitotsuboshi Journal of Economics, 5(1):16-36

Krishna, P. (1998). Regionalism and Multilateralism: a Political Economy Approach. Quarterly Journal of Economics, 113 (1): 227-250. https://doi.org/10.1162/00335539851144162

Laursen, K. (2000). Do Export and Technological Specialisation Patterns Co-evolve in Terms of Convergence or Divergence?: Evidence from 19 OECD Countries, 1971-1991. Journal of Evolu- tionary Economics, 10, 415-436.https://doi.org/10.1007/s001910000044

Laursen, K. (2015). Revealed Comparative Advantage and the Alternatives as Measures of Interna- tional Specialization. Eurasian Business Review, 5(1): 99-115. http://dx.doi.org/10.1007/s40821- 015-0017-1

Leromain, E. and Orefice, G. (2014). New Revealed Comparative Advantage Index: Dataset and Empirical Distribution. International Economics, 139: 48-70. http://www2.cepii.fr/ PDF PUB/wp/2013/wp2013-20.pdf

Levchenko, A.A., and Zhang, J. (2016). The Evolution of Comparative Advantage: Measurement and Welfare Implications. Journal of Monetary Economics, 78: 96-111. http://dx.doi.org/10.3386/w16806

Liesner, H.H. (1958). The European Common Market and British Industry, Economic Journal, 68: 302-316. http://dx.doi.org/10.2307/2227597

Lloyd, P.J. and MacLaren, D. (2004). Gains and Losses from Regional Trading Agreements: A Sur- vey, Economic Record, 80(251): 445-467. http://dx.doi.org/10.1111/j.1475-4932.2004.00202.x.

Richardson, D.J. and Zhang, C. (1999). Revealing Comparative Advantage: Chaotic or Coherent Patterns across Time and Sector and U.S Trading Partner? National Bureau of Economic Research, Working Paper 7212. http://dx.doi.org/10.3386/w7212

Robinson, S. and Thierfelder, K. (2002). Trade Liberalization and Regional Integration: The Search for Large Numbers. Australian Journal of Agricultural and Resource Economics, 46(4): 585-604. http://dx.doi.org/10.1111/1467-8489.t01-1-00057

Ronen, E. (2017). Quantifying the Trade Effects of NTMs: A Review of the Em- pirical Literature. Journal of Economics and Political Economy, 4(3): 263-274. http://dx.doi.org/10.1453/jepe.v4i3.1360

UNSD (2013). Commodity Trade Database (COMTRADE). New York: United Nations Statisti- cal Division. Available through World Banks World Integrated Trade Solution (WITS) software: http://wits.worldbank.org

Vollrath, T.L. (1991). A Theoretical Evaluation of Alternative Trade Intensity Measures of Revealed Comparative Advantage. In Weltwirtschaftliches Archiv, 130 (2): 265-279. http://dx.doi.org/10.1007/BF02707986